In this episode of our series, Crypto isn’t all about Bitcoin our focus will be on an emerging sector of Blockchain Technology that is already disrupting the Gaming industry. In our previous episode we talked about altcoins.
Blockchain Technology isn’t all about money as it is commonly thought of, but the application of the technology ranges into diverse sectors like gaming, logistics, healthcare, art, etc. Our focus in this article will be the Gaming Industry.
Gaming Industry in 2021
Gaming industry data from Statistica reveals that Activision Blizzard the company behind Call of Duty: Black Ops, Call of Duty: World of War, and Call of Duty: Modern Warfare was the largest video game company in 2021 with an estimated market cap of $70.74 billion – a 25% increase from May 2020.
Second on the list is Japanese gaming giant Nintendo, with a 64.73 billion market cap followed by EA the company responsible for FIFA and Star Wars games, with an estimated market cap of $37.43 as of March 2021.
According to Accenture’s report:
Gamers are spending an average of 16 hours a week playing, eight hours a week watching or participating in game streams, and six hours a week interacting in-game forums and communities.
Further Gaming industry statistics reveal that China is the biggest gaming market in the world, followed by the United States of America. China and United States generated $40.8 billion and $36.9 billion respectively last year.
Why Play to Earn?
Blockchain Technology offers alternative ways of doing things that can add more value. This is exactly why Play2Earn (play-to-earn) was thought about. To understand this better let’s take a look at two traditional gaming norms:
1. Pay-to-play: game companies have to meet up with the running costs of the business like any firm. Basically in this category game players pay the game company in form of subscriptions to play the game just like you pay for your cable TV.
2. Play-for-free: here players need to either download the game, visit the game website, or purchase game console/hardware to play the game for free anytime. Games in this category have their method of generating revenue either through the sale of game hardware, software, or advert placement.
In both categories highlighted the players do not earn revenue from playing the game but do you know with Blockchain, players can play to earn?
Play to Earn
Play to earn or play2earn opens up a new game economy where players are also compensated for their time like the game company and developers. Imagine killing zombies in a game and getting paid for it? This is the possibility that Play2Earn or P2E brings.
For a better understanding of P2E let’s take a look at some Blockchain Play2Earn based games;
Axie Infinity is a trading and battling game that allows players to collect, breed, raise, battle, and trade creatures known as “Axies” (characters based on axolotl), which are digitized as NFTs.
New players need to purchase at least three axies to begin playing. In February 2020, Sky Mavis estimated that the average player had spent around US$400 to match this starting requirement. By December 2021, the starting cost for three axes was up to US$1,000.
The game uses a “pay-to-earn” model (also called the “pay-to-play-to-earn” model) where after participants pay the starting costs, they can earn an Ethereum-based in-game cryptocurrency by playing. Axie Infinity allows users to cash out their tokens every fourteen days.
LuxeRacing is a Blockchain-based racing game developed on the BNB Smart Chain. The game involves supercars like Lamborghini Aventador and Ferrari Pista as NFTs that can be purchased and used in the game.
The game already has a playable beta that can be downloaded on the website with the current implementation of a play2earn mechanism that will feature the fastest lap competition. So a player has to finish the lap as the fastest and earn LUXE tokens in the process.
Metalands is a first-person shooter game (FPS) developed by Citizen Finance. The game will utilize a play2earn mechanism via the BNB SmartChain. This will be similar to playing Call of Duty and being able to earn from it.
The game currently has a playable Pre-alpha that can be downloaded from the website. Game players will earn Meta or xMeta tokens and can exchange them for the blockchain-based token CIFi which will serve as the medium of exchange.
Metalands will also have a Bunker system which will be a metaverse. The Bunker will be a semi-built 3D environment belonging to players. Each player has the right to customize their bunker, characters, and weapons with assets that can be withdrawn and traded as NFTs.
Metalands will offer players the ability to earn through:
- Gameplay activities
- Monetization of bunker experience
- Trade content such as weapon skins, character outfits, and NFTs.
- Live stream events such as gameplay and bunker customization.
Metalands will offer free-to-play and play-to-earn modes. But to earn a player has to buy Reward Passport.
Reward passport is an official #NFT issued by Metalands that contains monthly earning quotas. It enables its holder access #Playtoearn mechanism on #Metalands first person shooter #metaverse.
— Metalands (@Metalandsgg) February 18, 2022
Conclusion on Play2earn
The introduction of the play2earn model came at a very good time but careful observation of the model would reveal it isn’t play-to-earn but pay-to-play-to-earn. What this means is players have to pay before they can play-to-earn.
Furthermore, if you carefully observed in all three games we listed above, new players have to invest either by buying NFTs, Reward Passes, in-game items, or tokens before they can start playing the game, and earning is spread across a period.
Play to earn should be called pay-to-play-to-earn but for this article that is not our focus. We are happy we were able to cover another interesting aspect of crypto called play-to-earn and in the process let you know Crypto isn’t all about Bitcoin.